Negative inflation means no change for ComSuper indexed pensions in January 2021

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The Australian Bureau of Statistics has released the Consumer Price Index (CPI) data for the September 2020 quarter showing that the index has decreased to 116.2 from 116.6 for the March 2020 quarter.

While the index is negative over the six-month period, this should result in no change for indexed pensions from the Commonwealth Superannuation Scheme (CSS), Public Sector Superannuation Scheme (PSS) and Military Superannuation and Benefits Scheme (MSBS or MilitarySuper) from the first pension payday in January 2021.

The indexed portion of pensions from the Defence Force Retirement and Death Benefits (DFRDB) Scheme involves different rates of indexation depending on the recipient’s age at the adjustment date.

DFRDB recipients aged less than 55 years receive the CPI-linked adjustments on the indexed portions of their pensions.

The indexed portions of DFRDB pensions for recipients aged over 55 years of age is the greater of the CPI increase, the change in the Living Cost Index for pensioners and beneficiaries, or the increase needed to maintain the value of an indicative pension with 27.7% of Male Total Average Weekly Earnings (MTAWE). 

Due to a negate rate in the relevant Living Cost Index, the 0% CPI linked adjustment will apply in January 2021 for all DFRDB recipients.

See also: DFRDB pension increases

While not applicable in January 2021 due to the negative CPI result, a pro rata increase would normally apply to any indexed pensions started less than six months before the indexation date.

Historical CSS, PSS and MSBS indexed pension increases

Date of increaseRate
January 20210.0%
July 20201.0%
January 20201.1%
July 20190.5%
January 20190.8%
July 20181.1%
January 20180.8%
July 20171.0%
January 20171.1%
July 20160.2%
January 20161.1%
July 20150.4%
January 20150.9%
July 20141.3%
January 20141.6%
July 20130.6%
January 20132.1%
Source: Australian Bureau of Statistics (ABS)